New Car Purchase Down Payment

[doitmyself]

If a person ends up having to order a car at a dealer (vs. buying off the lot) and he makes a down payment to show good faith ($500), is there any need to have something in writing protecting him from losing the down payment?

I've been told that the dealer cannot legally keep the down payment.

Assume that both parties are dealing in good faith. But, the vehicle is delivered with a damaged exterior panel that ia obviously repainted (not factory finish) and the buyer opts out of the purchase. What would happen?

I'm not talking about opting out of the deal due to nitpicking. Another example might be some catastrophic life event for the buyer and he decides not to buy the vehicle.

Is there a need and/or way to protect the buyer in order to get the down payment back?

As always, thanks for the thoughtful input.

 

[Cold_Canuk]

Just be clear with them, they want your business. You're right to be cautious when dealing with the dealership bunch. I have yet to see a dealership that isn't <80% weasels.

 

[Rock_Hudstone]

Use a credit card for the deposit, no cash or checks. That way one can dispute the charge if there is a problem. As for damaged goods, I would refuse to accept delivery and ask for another vehicle or a major discount.

Anyway why special order? With option packages and the limited interior/exterior colors available these days special ordering is asking for trouble, (in addition to losing all negotiation leverage).

 

[hattaresguy]

Use a credit card and put as much on the CC as possible to get the points!

 

[sciphi]

Originally Posted By: hattaresguy
Use a credit card and put as much on the CC as possible to get the points!


This. If the dealer keeps it, it's easy enough to dispute with the CC company when a buyer wants out due to damage on the car or changed circumstances.

 

[147_Grain]

Your greatest bargaining tool is the delivery on the vehicle. IF the dealer does everything you ask him to do (within reason), then complete the purchase in order to be on good terms for future dealings.

Use the wait time to get acquainted with key personnel in the service / parts department and this will payoff in a big way after you take delivery and return for service. Finding out who the general manager is and introducing yourself (before delivery) is also wise.

Good luck with your purchase.

 

[147_Grain]

P.S.:

The key here is to build some positive bridges / relationships that will set yourself up for success with the dealership in the future. This will likely save you a lot of money in the future in comparison to staying in your comfort zone and doing nothing.

 

[itguy08]

When I ordered my G35 in September 2003 I had them write on the contract "Deposit is fully refundable". They knew my purchase was based on me selling my Explorer first. Sold the Explorer a month and a half later and picked my car up in Jan 2004.

 

[JHZR2]

Originally Posted By: hattaresguy
Use a credit card and put as much on the CC as possible to get the points!


+1

 

[itguy08]

Originally Posted By: Rock_Hudstone

Anyway why special order? With option packages and the limited interior/exterior colors available these days special ordering is asking for trouble, (in addition to losing all negotiation leverage).


Depends on what you want and how picky you want to be. I've been on and off truck shopping and good luck finding a F150 with max tow and max payload package around here. Seems to be order only.

When I bought my G35, nobody had loaded sedan 6MTs . Had to order.

Or if you hate a color (for me it's silver) and all they have with the packages you want is that color.

 

[JimPghPA]

Originally Posted By: hattaresguy
Use a credit card and put as much on the CC as possible to get the points!


+2

If you use cash or a check and then the dealer goes bankrupt before you get the vehicle you are S.O.L.

But if you use a CC and the dealer goes bankrupt before you get the vehicle the CC company probably will help, depending on the quality of the CC company.

 

[JimPghPA]

Years ago there was an auto dealer that went bankrupt in this area, and recent customers who used the dealer to handle the paper work, could not get their state plates for the vehicles because the dealer kept the state tax payment that the customer gave them upfront, and the state will not issue a plate until they have received an appropriate tax payment.

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When it comes time to pay the state tax write a separate check to the state, and give that to the dealer or notary to process with the paper work. That way if the dealer or notary goes bankrupt between the time you deal with them and they send in the payment, the dealer or notary can't cash the check.

 

[JimPghPA]

Originally Posted By: itguy08
Originally Posted By: Rock_Hudstone

Anyway why special order? With option packages and the limited interior/exterior colors available these days special ordering is asking for trouble, (in addition to losing all negotiation leverage).


Depends on what you want and how picky you want to be. I've been on and off truck shopping and good luck finding a F150 with max tow and max payload package around here. Seems to be order only.

When I bought my G35, nobody had loaded sedan 6MTs . Had to order.

Or if you hate a color (for me it's silver) and all they have with the packages you want is that color.



Would a stock F250 or a stock F350 have what you want, and be a better deal because of the higher value when you trade it in?

 

[itguy08]

Originally Posted By: JimPghPA

Would a stock F250 or a stock F350 have what you want, and be a better deal because of the higher value when you trade it in?


Probably would. Not in a hurry to move and really at this point evaluating all options - new, used, whatever. I figure the longer I wait the more $$ I have! It's more of a want than need which helps a lot!

 

[Quattro Pete]

Back when i ordered my A4, it wasn't even called a down payment. It was a deposit and it was fully refundable. I'm sure you could ask the dealer for the terms and conditions so that you're clear if and under what circumstances you can back out of it. Otherwise, just use CC, as was suggested.

 

[HyundaiGuy]

I sold/financed VWs for eight years (don't shoot me) and we took $500 "good faith deposits" on incoming/dealer trade cars all the time. People very rarely backed out, but if they wanted to, we refunded their deposit. The credit card advice was good.

 

[doitmyself]

Thanks for the wonderful advice so far.

Why order? Here's my explanation to appease the "righteous" in the crowd at BITOG (don't want the NickR once over!). I've never ordered a new car in my life. And, sometimes have bought used, depending on the circumstances.

-Our 9 year old, well maintained Caravan is ailing bad and I've determined that putting in additional $$$$$$ is not prudent. I can't wait for the end of model year savings. No need to get more into this.
-Payed above vehicle off 6+ years ago, saved cash for new. We keep/use only one vehicle at a time, 9 years+. I prefer one good one vs. two lesser ones (insurance/maint. savings). I am aware of the new vs. used cost of ownership realities. No schooling required here either.

-The model that fits our needs/budget is already a 2014 this March. I don't want the '13 (with savings) because of the CVT ('14 is auto).
-We ONLY want air conditioning and certain color (happy wife). Yippee....less = more KISS. We are the minority...vehicles are appliances (flame suit on). Edit-very well maintained,waxed appliance. I appreciate that others can indulge in luxury/recreation vehicle use.
-Very few base models are on the lots. Only one exists in our area....its 250 miles away...I don't want someone else driving it that far (dealer trade).

-With VERY diligent, months long effort (touched upon in my recent Honda thread), I received an offer tonight that astounded me (about 1K below invoice, out the door). I don't think I could do much better on a '13 or "on lot" model. Not counting the hatched chicks yet, because I am leery of possible shenanigans (knock on wood, kiss the Blarney stone, rub [censored]'s head, etc.

). Will walk, if that happens.

That's about it.

Any additional advice regarding the down payment/deposit is appreciated.

 

[JHZR2]

Originally Posted By: Rock_Hudstone


Anyway why special order? With option packages and the limited interior/exterior colors available these days special ordering is asking for trouble, (in addition to losing all negotiation leverage).



The option package thing is stupid for sure.

But it is fully possible to negotiate a great deal in an ordered car. We did on the last two vehicles we purchased.

 

[eljefino]

Originally Posted By: JimPghPA

If you use cash or a check and then the dealer goes bankrupt before you get the vehicle you are S.O.L.

But if you use a CC and the dealer goes bankrupt before you get the vehicle the CC company probably will help, depending on the quality of the CC company.


I'd say it's a pretty sure bet. Per law if you have problems with the quality of a CC purchase you have an out with your bank. Not getting an item in the first place is a pretty big quality problem.

Plus of course you're not fighting to get your money back, CC is fighting to get it out of you.

 

[zzyzzx]

I had an issue kind of like this once. I ordered a car, and put down a $500 deposit (this was in late 1984). The factory then refused the order. When I went back to the dealer (this was probably a month after I had placed the order), they happened to have another car on the dealer's lot that I wanted so the deposit was applied to this other car.

I had ordered a V6 Mustang, and at the time they weren't making V6 Mustangs at the time except for convertibles since all of the available V6 engines were being used in T-Birds. When I went back to the dealer to figure out what to do, I saw a 1985 Escort GT that I bought and drove for the next 11 years.